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As we race toward 2024 (already!), the retail beauty industry continues to ride the wave of its robust performance from a breakout year. In 2023, the industry witnessed substantial growth, with the online cosmetics market size alone reaching an estimated $13.79 billion, bolstered by a Compound Annual Growth Rate (CAGR) of 8.47%. Beauty as a whole is valued around $98 billion in the US, and expected to continue growing at over 7% each year.
This impressive growth trajectory is not just a testament to the sector's resilience coming out of the pandemic era, but also to the evolving consumer behaviors and technological advancements that are shaping the industry in real-time. In fact, for an industry that is nearly as old as civilization itself, the beauty industry’s ability to adapt and innovate has been key in maintaining this momentum, making it one of the most vibrant and forward-looking sectors in the entire retail landscape.
Here at Endear, we expect the beauty & self care segments to continue to grow at a rapid clip in 2024, and here are some of the trends we’re seeing that are poised to break out next year.
A significant contributor to this growth has been the explosion of the beauty market in overseas territories, particularly in countries like China and India. These regions have shown an enthusiastic embrace of beauty products, significantly buoyed by the surge in online sales. In 2022, China’s revenue from the online beauty market topped the US by over a billion dollars ($10.4 to $9.28 billion, respectively). As China’s economic power continues to pace the US, it’s making beauty products more accessible to a broader audience and creating new opportunities for brands to reach consumers.
Over in India, which has now overtaken China to be the most populous country on Earth, the appetite for beauty products is soaring as the younger generation start to wield their economic power. Keep in mind India has a much younger population than China as well with 65% under the age of 35, meaning many more young adults who grew up with beauty influencers are hitting the market.
The integration of e-commerce platforms and social media marketing strategies has particularly resonated in these regions, allowing consumers to explore and purchase beauty products with unprecedented ease and convenience. US beauty and wellness brands should embrace retail internationalization to reach and sell to new consumers in these countries. Even something relatively simple as a language toggle or a currency toggle on your ecommerce site can encourage more foreign shoppers that can bolster your revenue in 2024.
Biomimetic Skincare Revolution
The rise of biomimetic skincare represents another exciting development in the beauty sector. Driven largely by the influence of TikTok and other social media platforms, this trend focuses on products that mimic biological processes and ingredients found in nature, namely your own skin. The appeal of biomimetic skincare lies in its promise of natural, effective solutions that are in harmony with the body's own mechanisms.
This sector's popularity is not just a passing trend; projections suggest it will be valued at over $10 billion by 2030. Influencers on platforms like TikTok have played a crucial role in this growth, showcasing the benefits of these products and creating a more informed and engaged consumer base. As a result, biomimetic skincare is not only redefining beauty standards but also driving significant market growth, especially due to the rise in the popularity of healthy aging as well as a better consumer understanding of the chemicals that one puts on their face and body.
Beauty brands that are able to tout biomimetic ethos and ingredients will continue to eat up market share from younger shoppers. This also means education will be an important component of beauty marketing campaigns, which leads us to…
Evolving Beauty Marketing Strategies
In the realm of marketing, the beauty industry is witnessing a shift towards strategies that prioritize brand trust via health and authenticity. Influencers and skincare professionals (ie. dermatologists) are increasingly becoming pivotal in marketing campaigns, offering a more relatable and trustworthy perspective to consumers. This approach is not just about promoting products; it's about creating a narrative that resonates with the audience's desire for genuine, effective solutions, and educating them about the benefits of particular brands.
Alongside influencer partnerships, there's a growing emphasis on highlighting healthy ingredients and transparent production practices. This trend reflects a broader consumer demand for products that are not only effective but also ethically produced and environmentally sustainable. Brands that are able to effectively communicate these values are finding a more engaged and loyal customer base.
So if you haven’t already noticed, short videos are dominating engagement in beauty marketing. Be it on Instagram, YouTube, or TikTok; so much more of the marketing content that is cultivating loyalty comes from a place of relatability and health-authority. To capitalize, your brand should connect with trusted doctors and influencers in 2024 to create short video content around your products.
Hyper-Personalization in Beauty
Another trend that will dominate the retail beauty landscape in 2024 is the move towards hyper-personalization. This is not just about creating products that cater to individual skin types or preferences; it's about acknowledging and addressing the needs of specific groups of consumers, such as minority groups that didn’t have much of a voice in past decades. This approach reflects a deeper understanding of the diverse nature of beauty and the importance of inclusivity in product development and marketing.
Beauty brands that engage in hyper-personalization can use clienteling principles and cater to specific customers where they currently are in their beauty journey. Is she into biomimetics? Then recommend those specific products to her, in her skin tone. Is she embracing the “anti-beauty” trend? Here’s a landing page of products just for her. With good customer data in your CRM, this type of personalization is not just possible, but necessary to win in 2024.
Personalized beauty solutions offer a more tailored experience, ensuring that consumers feel seen and understood. This trend is about more than just customization; it's about creating a sense of belonging and connection with the brand. As the industry continues to evolve, this focus on personalization and inclusivity will likely become a cornerstone of successful beauty retail strategies.
As we look ahead, the retail beauty industry is poised to continue its trajectory of growth and innovation. The trends we're seeing in 2024 are not just shaping consumer preferences but are also redefining how beauty brands connect with shoppers as a whole. From the expansion of global markets to the rise of personalized skincare solutions, the industry is at the forefront of a transformative era that promises to be as exciting as it is dynamic.